from the well-that's-comforting dept

As has been predicted and expected for quite some time, Hulu has finally announced its subscription plans. Let's start with the one thing they got right: unlike some newspaper paywalls and such, they're not technically putting the existing offerings behind this subscription wall. Technically, you can still use Hulu for free the same way you did in the past, but as I explain in a bit, this might not work out in practice. So what do you get for your $10 per month? Well, you get access to the latest full season of shows from ABC, NBC and Fox (co-owners of Hulu). Of course, this isn't exactly a benefit. It just means that, unlike currently, Hulu doesn't delete shows quite as quickly -- a point that had been annoying users of the site. What else do you get? Well, you still get the annoying pre-roll/mid-roll/post-roll commercials, so you're not paying to get rid of those. And... hmm... well, if you pay, Hulu is just slightly less obnoxious about trying to block you from accessing the content on a television (even with a perfectly legitimate setup).

That appears to be it. I'm trying to figure out who thought this was compelling. Basically, for $10/month, Hulu will be slightly less annoying to the average user by not deleting content during the season and maybe kinda sorta letting you access Hulu on your TV if you happen to use the "approved" equipment. Of course, you could also use a system that gets around Hulu's bizarre and pointless TV blocks just as easily, but we'll skip over that for now.

Looks like another lost opportunity. Hulu could have come up with real reasons to buy by actually adding value. Instead, it just focused on being slightly less annoying. Some might not see these as being all that different (doesn't it add value to be less annoying?). That's true, but there is a fundamental difference: anyone can be less annoying without getting people to pay for it. Any business should be striving to be less annoying all the time in their core product. When you set up your subscription service around "we'll be less annoying," you've now given yourself a perverse and dangerous set of incentives. You now have the incentive to be more annoying in your core product in a push to get people to sign up for the less annoying product. Effectively, it's nagware, which may work for some segment of the market, but is not about providing more positive value, but about minimizing negative value. That's not a growth strategy.

from the nicely-done dept

Tom sends over the story of an independent filmmaker, Stevie Long, who wrote and acted in the low-budget indie film Strictly Sexual that has found tremendous success by being online where people can watch it for free. Apparently, Long had a deal with some sort of online distributor, who got the film on Hulu, and word of mouth made it the most watched film on Hulu, ever:

"I woke up one morning and found a dozen or so messages in my Facebook inbox, saying, 'Hey, I just saw this film, and it really touched me, and I love the way it talks about breakups and relationships,' " Long says. "And I just scratched my head, saying, 'Where'd you see my movie?' I had no idea what Hulu was. God bless the people who had the foresight to put it up there.... We were fortunate in that the timing of the Internet and the ability to watch movies came about at the same time. I didn't have any ego about it as an artist, I just wanted my movie to be seen."

But, of course, it's not hurting him financially either:

"I'll give it to you in these rough terms," he says. "The $100,000 film has made 10 times its money."

But... but... but... we keep having Hollywood insiders tell us in our comments that indie filmmakers who distribute online can't possibly make back enough money to cover their costs. Everything's impossible until someone does it.

from the hold-your-horses dept

A ton of readers here have been submitting various versions of stories claiming that Hulu is getting rid of free content. I'd been ignoring the story, because it's a non-story at this point. But people keep submitting it, so let's go through the details. Basically, at a Broadcasting & Cable event, News Corp. Deputy Chairman Chase Carey basically said that free content isn't the best way to monetize and that Hulu "concurs." Here's specifically how B&C reported it:

"It's time to start getting paid for broadcast content online," he said. Carey said that while everyone cites the infamous Jeff Zucker quip that "We'e exchanging analogue dollars for digital dimes," the industry continues to do exactly that. The strategy needs to be more than just fighting piracy and Google, he says.

"I think a free model is a very difficult way to capture the value of our content. I think what we need to do is deliver that content to consumers in a way where they will appreciate the value," Carey said. "Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business."

AdVerse had a quick chat with Carey too and posed the question, when exactly does Hulu start charging then? Carey, who says he's only been to one Hulu board meeting since arriving at News Corp., suggests there is still no timeline but supposes it's at least in 2010. Carey says that while throwing up a pay-wall around all content is not the answer, it doesn't mean there wont be fees for some specially-created content and TV previews

So... this is really no different than what was said a few months back, when News Corp's Jon Miller started saying that Hulu should add subscription offerings. It's the official News Corp. position, ever since Rupert Murdoch suddenly flip flopped and decided free content online is evil. All News Corp. execs have now been making noise about trying to charge for content.

But... Carey is just one board member, not Hulu management, and has only been to one board meeting -- this is hardly an official announcement. He even admits that a paywall is not the answer. This isn't anything official from Hulu. So, before we freak out about how dumb this is, let's wait and see what Hulu actually does. As we've been seeing the ad rates on Hulu can be quite impressive, and the site itself is still somewhat new. So, yes, giving up on free content would be dumb, and would just drive people back to file sharing for TV shows. But until we see what Hulu is actually planning, the claim that Hulu is giving up on free content simply isn't supported by what's been said.

from the that's-one-way-to-look-at-it dept

Hulu, the online video site that has content from most of the major networks, has largely been an early success. While it's thrown up some barriers to users, it's done a decent job of putting attractive content in an easily accessible format, and users have flocked to it. Still, we've wondered if the site will be able to survive in the long run because of the demands of its content providers, which seem to be behind its user-unfriendly moves. To get a glimpse of the thinking that drives these actions, check out a piece over on Paidcontent called Memo To Networks Re Hulu: You're Making A Big Mistake, written by a former TV development exec. He says that giving users what they want -- in the form of Hulu -- isn't a good idea because it undermines the TV networks' brands. He uses the example of NBC, saying its value isn't its programming, but rather "the more than 70 years that it has taken the network to create expectations for generation... The years that it has taken the network to train consumers to expect a level of quality that can't be matched."

Wow. We've talked a lot before about how media companies overvalue their content and don't realize the importance of the services that distribute it, but completely ignoring the value of the content in favor of a TV network brand seems only slightly ridiculous. The guy is right in that network brands don't have any meaning any more, but it's not Hulu that did this. It was because the networks failed to keep up with changing viewer preferences and demands, and responded to the rise of the DVR and other new technologies with attempts to set up obstacles, rather than innovation. Viewers' loyalties now lie with individual shows, and the channel upon which they're transmitted is meaningless. The strong brands are the shows, not the networks. People simply set their DVR to catch all the programs, or they go to Hulu, ignoring the network. Even people who watch their TV the old-fashioned way don't have much awareness or interest in the network brands, beyond the evening newscasts (maybe). The former exec's advice for networks is to keep their shows locked up on their own sites so they can "stand by their brand." But where does the brand ever deliver the value that he thinks they have? Sure, the networks can try to prop up their brands by making things more difficult for their audience online -- but they've tried that strategy, and it hasn't worked. So perhaps opening up access to their content, and getting themselves (and their brands) out of the way, is a better way forward.

from the live-by-copyright,-die-by-copyright dept

The main backers of the online video site Hulu, NBC Universal and News Corp., are two of the stronger supporters of our copyright system, and have, at times, been known to push to make it even more stringent in order to "protect" their works. So, it's interesting to see them discovering that draconian copyright rules can come back and bite them as well. We were just covering some of the problems various TV shows have had being put on DVD due to licensing problems, and now it appears those same problems are making it difficult to get some shows up on Hulu -- despite the fact producers would like those shows online.

One of our readers, named Mark, wrote in to let us know that he and his wife had been watching the old TV show The Pretender on Hulu, when they realized that some of the episodes were simply missing (including the entire final season). He wrote to Hulu to ask why, and was told:

"Thank for letting us know that some episodes from The Pretender appear to be
missing from our lineup. Individual episodes are sometimes held up due to rights
issues, quite often related to music used in the show - and that's the case this
time - some of the music in episodes 17 and 18 couldn't be cleared for online
streaming. We'll continue to request them from our content partner, but at this
time we can't offer them though we'd love to."

It's still difficult to understand why we would ever design copyright law and licensing policy in this manner. After all, having certain songs included in a TV show is never going to hurt the commercial viability of a song.

from the rising-tide-etc-etc dept

The FT's got a story saying "YouTube is in danger of being upstaged commercially" by Hulu, the online video site owned NBC and News Corp. It's based on a report saying Hulu will make as much in advertising revenues as YouTube next year, about $180 million, despite having far fewer active users. Two points: first, is this really surprising given the strengths of Hulu's parents at selling advertising around content; second, when did this become a zero-sum game? The article sets up some sort of adversarial relationship between Hulu and YouTube, or between professional and user-submitted content. While perhaps there's some competition for advertising dollars -- as there is between any two parties selling ad space -- the two sites don't have to succeed solely at the other's expense. Despite what the likes of Andrew Keen would have us believe, there's room enough on the web for both professional TV shows and amateur fat cat videos, and the success of one doesn't intrinsically mean the failure of the other.